Gray v. Rizzi,

• Jurisdiction: Ontario
• Judge: Sharpe, D. Brown and Miller, JJ.A.
• Neutral Citation: 2016 ONCA 152
• Citation: (2016), 345 O.A.C. 175 (CA),2016 ONCA 152,129 OR (3d) 201,[2016] OJ No 958 (QL),[2016] O.J. No 958 (QL),129 O.R. (3d) 201,345 OAC 175,345 O.A.C. 175,(2016), 345 OAC 175 (CA)
• Date: 18 December 2015
• Court: Court of Appeal (Ontario)

Gray v. Rizzi (2016), 345 O.A.C. 175 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. FE.032

Nadine Ellen Gray (applicant/appellant/respondent by way of cross-appeal) v. Mario Rizzi (respondent/respondent/appellant by way of cross-appeal)

(C59047; 2016 ONCA 152)

Indexed As: Gray v. Rizzi

Ontario Court of Appeal

Sharpe, D. Brown and Miller, JJ.A.

February 25, 2016.

Summary:

A wife brought an application for divorce and corollary relief in December 2003. At a case conference on February 4, 2005, the parties reached agreement on an interim order for custody and access. The agreement required the husband to serve and file his Answer and financial statement within 30 days, failing which the wife had leave to proceed by way of uncontested trial. He failed to do so. As a result, Loukidelis, J., made a Final Order on November 1, 2005 dealing with custody, access, child support, and spousal support. The Final Order granted the wife sole custody of the parties' two children and placed the husband's access to them in the wife's sole discretion. It imputed annual income to the husband of $133,000. Finally, it ordered him to pay $1,584/month child support, $2,874/month spousal support, as well as a proportional share of s. 7 expenses, all retroactive to the date of separation. In 2009, the husband initiated two proceedings: (1) a motion to set aside the Final Order; and (2) a motion to change the Final Order under s. 17 of the Divorce Act on the ground that he had experienced a material change in circumstances as a result of a significant reduction in his income.

The Ontario Supreme Court, in a decision reported at [2010] O.T.C. Uned. 2858, dismissed the motion to set aside the Final Order. The husband appealed.

The Ontario Court of Appeal, in a decision reported at [2011] O.A.C. Uned. 399, dismissed the appeal.

The Ontario Supreme Court granted the husband's variation application on June 10, 2014 ("Variation Order"). The court held that the husband had demonstrated that he had experienced a material change in circumstances in the period prior to the making of the Final Order, justifying a reduction in his child and spousal support obligations retroactive to the parties' separation in 2002. The court terminated the wife's spousal support effective 2006. The court recalculated the husband's imputed income for 2002 through 2013 and, based on that recalculation, fixed the total spousal and child support due from the husband to the wife from the date of separation to the end of 2013 at $171,118. The court then specified the deductions to be made from that amount, including all monies paid by the husband for child and spousal support, thereby eliminating about $320,000 in support arrears owed by the husband. The court ordered the wife to reimburse the husband for overpayment of support (about $113,000). The court ordered that child support for the parties' daughter in 2014 would continue at the greater of the husband's imputed income of $60,000 and his actual income from all sources that year. The wife appealed. Both parties appealed the trial judge's September 10, 2014 cost award of $15,000 in favour of the husband.

The Ontario Court of Appeal granted the wife's appeal in substantial part, holding that the trial judge erred in principle by relying on changes in the husband's circumstances that predated the making of the Final Order to grant the Variation Order. She also failed to apply the principles governing variations in child and spousal support as set out in case law by the Supreme Court of Canada. Finally, she erred in failing to advert to the fact that the elimination of support arrears would require the wife to pay the husband a substantial amount of the support previously paid. In light of those errors, the court considered the husband's variation motion, found that he had experienced a material change in his financial circumstances after the Final Order and varied his child and spousal support obligations. While the variation would have some retroactive effect, the husband would remain obligated to pay significant support arrears and the wife would not be required to make any repayment to him. The court awarded the wife $10,000 for the application and $7,500 for the appeal.

Family Law - Topic 2211

Maintenance of spouses and children - General principles - Retrospective or retroactive orders - In D.B.S. v. S.R.G. (2006 S.C.C.), the court extensively canvassed the principles applicable to a request to vary child support payments - The Ontario Court of Appeal held that a trial judge erred in holding that the principles in D.B.S. did not apply to cases in which the payor's income had decreased substantially - In Corcios v. Burgos (2011 Ont. Sup. Ct.), Chappel, J., adapted the D.B.S. principles to a motion to change a child support order where the payor had requested a retroactive decrease in support or rescission of arrears - The court found it hard to improve on the analysis set out at paragraph 55 of Chappel, J.'s reasons; it adopted her analysis and summarized the key principles - See paragraphs 43 to 64.

Family Law - Topic 2211

Maintenance of spouses and children - General principles - Retrospective or retroactive orders - Loukidelis, J., made a Final Order on November 1, 2005 dealing with custody, access, spousal support, and child support for the parties' two children, both of whom suffered from mental health problems - It imputed annual income to the husband of $133,000, where he had failed to make financial disclosure - The husband brought a variation application in July 2009, which was granted in 2014 (Variation Order) - The Ontario Court of Appeal held that the trial judge erred in (1) relying on changes in the husband's circumstances that predated the making of the Final Order to grant the Variation Order and (2) she improperly reviewed the correctness of the Final Order - The court held that, given the husband's desultory pursuit of his motion to vary, failure to provide timely financial disclosure, and failure to co-operate with the support enforcement agencies, absolutely no hardship should result to the wife from any retroactive variation order - The husband was not entitled to any retroactive variation of child support for his daughter because he only saw fit to fulfill his financial disclosure obligations on the eve of trial, over four years after he had initiated his application - The court did not interfere with the trial judge's variation of his 2014 support obligations for his daughter (calculated using the greater of an imputed income of $60,000 or his actual taxable income from all sources) - The son began receiving Ontario Disability Support Program payments in December 2010 - Consequently, child support for him should terminate as of December 31, 2010 - The husband was not entitled to any variation for his son before that date, nor to any rescission of arrears - See paragraphs 43 to 86.

Family Law - Topic 2211

Maintenance of spouses and children - General principles - Retrospective or retroactive orders - Loukidelis, J., made a Final Order on November 1, 2005 dealing with custody, access, spousal support, and child support for the parties' two children, both of whom suffered from mental health problems - It imputed annual income to the husband of $133,000, where he had failed to make financial disclosure - The husband brought a variation application in 2009, which was granted in 2014 - The wife appealed - The Ontario Court of Appeal allowed the appeal in substantial part, holding that the trial judge made errors in principle - The court accepted the judge's imputation of annual income of $60,000 to the husband - Further, this significant and sustained reduction in his annual income compared with the income imputed to him in the Final Order constituted a material change in his means and circumstances, meeting the threshold for a variation of the Final Order under ss. 17(4) and (4.1) of the Divorce Act - The court held that, by 2011, the wife had overcome the economic disadvantages she suffered from the breakdown of the marriage and had achieved a level of economic self-sufficiency - However, there was no basis to retroactively vary the husband's spousal support obligations before January 1, 2012, notwithstanding his initiation of the motion to vary in July 2009 - His delay in pursuing the variation application and instead pursuing a motion to strike the Final Order into 2011, his failure to make timely financial disclosure, and his failure to cooperate with the support enforcement agencies, all worked against any earlier retroactive variation date - See paragraphs 38 to 42 and 87 to 103.

Family Law - Topic 2353

Maintenance of spouses and children - Maintenance of children - Retroactive maintenance - [See first and second Family Law - Topic 2211 ].

Family Law - Topic 2384

Maintenance of spouses and children - Variation of - Grounds (incl. changed circumstances) - [See Family Law - Topic 2415 ].

Family Law - Topic 2415

Maintenance of wives and children - Practice - Disclosure of assets and their value - A trial judge relied on ss. 37(2) and 37(2.1) of the Family Law Act, R.S.O. 1990, c. F-3 (FLA), which authorized the variation of spousal and child support orders not only where there was a material change in circumstances, but also on the ground that "evidence not available on the previous hearing has become available ..." - She stated that "[t]here seems to be no good reason why there should be different tests for varying support under the FLA as opposed to the Divorce Act" - The Ontario Court of Appeal stated that "[w]hether that should be so or not, the fact remains that the statutes do contain different tests. Section 17 of the Divorce Act does not recognize, as a ground for a variation, that evidence not available prior to the making of a final order later becomes available. Furthermore, while it is not necessary on this appeal to interpret ss. 37(2) and 37(2.1) of the Family Law Act, I have great difficulty in conceiving that 'evidence not available on the previous hearing' could include financial information that was 'not available' because of a party's deliberate failure to meet his disclosure obligations." - See paragraphs 35 and 36.

Family Law - Topic 2421

Maintenance of spouses and children - Appeals - General (incl. standard of review) - [See Family Law - Topic 4019 ].

Family Law - Topic 4001.1

Divorce - Corollary relief - Maintenance and awards - Retroactive awards - [See all Family Law - Topic 2211 ].

Family Law - Topic 4017

Divorce - Corollary relief - Maintenance and awards - Awards - Variation of periodic payments or lump sum award - [See second and third Family Law - Topic 2211 and Family Law - Topic 2415 ].

Family Law - Topic 4019

Divorce - Corollary relief - Maintenance awards - Appeals - A husband brought a motion to change a final order for spousal and child support under s. 17 of the Divorce Act on the ground that he had experienced a material change in circumstances as a result of a significant reduction in his income - The trial judge allowed the motion - The Ontario Court of Appeal overturned the decision where the judge had made errors in principle - The court held that, where neither party had asked the court to remit the matter for reconsideration on proper principles, and given the lengthy delay below in disposing of the motion to change, it was appropriate for the court to deal with the issues raised by the motion to change - See paragraph 38.

Family Law - Topic 4022.1

Divorce - Corollary relief - Maintenance awards - To spouse - Extent of obligation - [See third Family Law - Topic 2211 ].

Family Law - Topic 4045.2

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Financial disclosure - [See second and third Family Law - Topic 2211 and Family Law - Topic 2415 ].

Family Law - Topic 4050

Divorce - Corollary relief - Maintenance - Enforcement - Payment or cancellation of arrears of maintenance - [See all Family Law - Topic 2211 ].

Words and Phrases

Evidence not available on the previous hearing - The Ontario Court of Appeal discussed the meaning of this phrase as found in ss. 37(2) and 37(2.1) of the Family Law Act, R.S.O. 1990, c. F-3 - See paragraphs 35 and 36.

Cases Noticed:

D.B.S. v. S.R.G. (2006), 351 N.R. 201; 391 A.R. 297; 377 W.A.C. 297; 2006 SCC 37, appld. [para. 12].

L.M.P. v. L.S., [2011] 3 S.C.R. 775; 424 N.R. 341; 2011 SCC 64, refd to. [para. 12].

DiFrancesco v. Couto (2001), 155 O.A.C. 32; 56 O.R.(3d) 363 (C.A.), refd to. [para. 16].

Trembley v. Daley, [2012] O.A.C. Uned. 640; 23 R.F.L.(7th) 91; 2012 ONCA 780, refd to. [para. 16].

Hickey v. Hickey, [1999] 2 S.C.R. 518; 240 N.R. 312; 138 Man.R.(2d) 40; 202 W.A.C. 40, refd to. [para. 18].

Willick v. Willick, [1994] 3 S.C.R. 670; 173 N.R. 321; 125 Sask.R. 81; 81 W.A.C. 81, refd to. [para. 23].

Shamli v. Shamli, [2004] O.T.C. Uned. A50; 2004 CanLII 45956 (Sup. Ct.), refd to. [para. 26].

Roberts v. Roberts et al., [2015] O.A.C. Uned. 425; 2015 ONCA 450, refd to. [para. 31].

Trang v. Trang, [2013] O.T.C. Uned. 1980; 29 R.F.L.(7th) 364; 2013 ONSC 1980, refd to. [para. 34].

Brown v. Brown (2010), 353 N.B.R.(2d) 323; 910 A.P.R. 323; 2010 NBCA 5, refd to. [para. 52].

Corcios v. Burgos, [2011] O.T.C. Uned. 3326; 2011 ONSC 3326, appld. [para. 55].

Kerr v. Baranow, [2011] 1 S.C.R. 269; 411 N.R. 200; 300 B.C.A.C. 1; 509 W.A.C. 1; 274 O.A.C. 1; 2011 SCC 10, refd to. [para. 93].

Statutes Noticed:

Family Law Act, R.S.O. 1990, c. F-3, sect. 37(2), sect. 37(2.1) [para. 35].

Counsel:

Cheryl Goldhart and Maneesha Mehra, for the appellant/respondent by way of cross-appeal;

Peter B. Cozzi, for the respondent/appellant by way of cross-appeal.

This appeal and cross-appeal were heard on December 18, 2015, by Sharpe, D. Brown and Miller, JJ.A., of the Ontario Court of Appeal. D. Brown, J.A., delivered the following decision for the court on February 25, 2016.